**South Korean Crypto Exchange Accidentally Gives Away $43 Billion Worth of Paper Bitcoin**

The world of cryptocurrency was left reeling earlier today as reports emerged of a jaw-dropping clerical error at South Korean crypto exchange Bithumb. In a shocking turn of events, the exchange accidentally sent 620,000 bitcoin (worth around $43 billion) to 695 users instead of the intended reward of 2,000 Korean won.

At current prices, this mistake would have been bad enough, amounting to a roughly $140 million giveaway. But it was apparently much worse than that. Bithumb itself has confirmed the error and revealed that the exchange's systems were not hacked or compromised in any way. Instead, the massive mistake was simply an administrative error.

"We would like to clarify that this matter has nothing to do with external hacking or security breaches," reads a translated version of Bithumb's post on the matter. "There are no problems with system security or customer asset management."

The incident highlights the concept of "paper bitcoin" - a reality where exchanges do not necessarily have all of the bitcoin they claim to have in reserve. This issue was at the heart of the infamous collapse of early bitcoin exchange Mt. Gox in 2014, which was by far the largest crypto exchange at the time.

According to blockchain data provider Arkham Intelligence, Bithumb has roughly $5.3 billion in assets, which is nowhere near the $43 billion it says it errantly awarded to some of its customers. This raises questions about the security and solvency of exchanges like Bithumb, which have been plagued by issues in the past.

Bithumb has a history of hacking incidents, with at least three reported since its launch in 2014. In one incident in 2017, an employee device was compromised, allowing hackers to conduct phishing attacks on customers. Another hack took place in 2018, where roughly $30 million in crypto assets were stolen by the Lazarus Group, a hacking group with ties to North Korea.

Perhaps most concerning in the context of today's incident, a further $20 million was stolen from Bithumb in 2019, and the incident was initially thought to be an inside job. It's worth noting that no customers have ever been affected by these hacks (outside of the leaks of personal information), with Bithumb covering the lost assets.

The latest incident at Bithumb comes at a time when the crypto market as a whole is under stress, with crypto asset prices severely down from the October highs. Ethics-related concerns associated with the Trump family's crypto businesses are also becoming an increasingly loud political issue for the administration.

Meanwhile, the investigation into Jeffrey Epstein's early investments and involvement in the crypto industry continues to unfold, leading to rampant speculation and Bitcoin conspiracy theories on social media.

Bithumb's Response

Bithumb has said that no loss of customer funds occurred as a result of today's incident, but there was potentially a risk of liquidations for leveraged traders during the price movement that occurred as a result of the falsely-awarded bitcoin. The exchange has also announced that it will be limiting withdrawals and transactions for the affected customers in order to prevent further damage.

Recovery Efforts

Bithumb claims to have recovered 99.7% of the errantly sent bitcoin, with only a small percentage remaining unaccounted for. While this is a significant achievement, it raises questions about the exchange's ability to manage its assets and prevent such mistakes in the future.